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Consolidated Annual Report On The Performance of Alkaloid in 2020
Consolidated Annual Report On The Performance of Alkaloid in 2020
February 2021
Consolidated annual report on the performance 31 December 2020
CONTENTS
1. General information
2. Financial risk management
3. Additions to non-current assets
4. Dividends
5. Borrowings
6. Major transactions
7. Related party transactions
8. Share capital
9. Key management compensations
Consolidated sales
Consolidated total sales
Consolidated sales by segments
Consolidated domestic market sales by segments
Consolidated foreign market sales by segments
Consolidated foreign market sales by regions/countries
Number of employees
Corporate governance
1. General information
Alkaloid AD Skopje, the Parent Company is a joint stock company, established and with head office in the
Republic of North Macedonia. The registered address of the Company is:
Aleksandar Makedonski 12 1000 Skopje, Republic of North Macedonia.
Major business activity: Alkaloid AD Skopje produces and sells wide range of pharmaceutical, chemical
and cosmetic products, as well as goods from herbal origin. According to the Trade Registry, Alkaloid AD
Skopje can perform wholesale operations and foreign trading with food and non food products.
The main scope is production of pharmaceutical products.
The shares of Alkaloid AD Skopje have been listed on the Macedonian Stock Exchange, since 2002.
Alkaloid AD Skopje is comprised of nineteen subsidiaries and one foundation in Republic of North
Macedonia and abroad. Subsidiaries are fully consolidated from the date on which control is transferred to
the Company. They are de-consolidated from the date that control ceases.
The Company's Annual consolidated report on the performance has been prepared in accordance with the
Trade Company Law (“Official Gazette of the Republic of Macedonia” no. 28/04, 84/05, 71/06, 25/07,
87/08, 17/09, 23/09, 42/10, 48/10, 8/11, 21/11, 24/11, 166/12, 70/13, 119/13, 120/13, 187/13, 13/14,
41/14, 138/14, 88/15, 192/15, 6/16, 30/16, 61/16, 64/18, 120/18, 195/2018, 225/2018, 239/2018 and 290/20
) and the Rulebook for accounting ("Official Gazette of RM" no.159/09, 164/10 and 107/11). The
consolidated report is prepared in accordance with the concept of purchase price, excluding the land
property, construction buildings and available-for-sale financial assets, which are presented by their market
value.
The presentation of the consolidated report on the performance in accordance with the Trade Companies
Law and the Rulebook for Accounting requires management to make best estimates and reasonable
assumptions that affect the amounts presented in the consolidated report. These estimations and
assumptions are based on reasonable information available, as of the date of preparation of the financial
statements. However, actual results may vary from these estimates.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair
value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's
overall risk management program focuses on the unpredictability of financial markets and seeks to
minimize potential adverse effects on the Group's financial performance. The financial risk management is
preformed by the Group's financial department, based on Decisions from Managing board.
Market risk
To manage the foreign exchange risk the Group provides enough cash in foreign currencies held in banks in
order to maintain its future commercial transactions.
b) Price risk
The Group is exposed to equity securities price risk because of available-for-sale investments held by the
Group. The Group is not exposed to commodity price risk.
Credit risk
The Group has no significant concentrations of credit risk. It has policies in place to ensure that wholesale
sales of products are made to customers with an appropriate credit history. Trade receivables consist of
large number of balances. The Group has policies that limit the amount of credit exposure.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding
through an adequate amount of committed credit facilities.
Interest risk
As the Group has no significant interest-bearing assets, the Group’s income and operating cash flow are
substantially independent of changes in market interest rates.
The Group’s interest rate risk arises from borrowings. The Group has no specific policy, but in direct
negotiation with lenders attempts to reduce interest rate risk. Interest rates of long-term borrowings are
significantly lower than short term. Interest rates on short term borrowings are decreased in respect of
previous year.
The fair value of financial instruments that are not traded in an active market is determined by makes
assumptions that are based on public information for recent arm’s length transactions or reference to other
instruments that are substantially the same.
The nominal value less impairment provision of trade receivables and payables are assumed to approximate
their fair values. The fair value of financial assets and liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the Group
for similar financial instruments.
The Company's estimates are based on experience and other factors, including expectations of future events
that are believed to be probable in the present circumstances.
Additions to non-current assets include additions to property, plant and equipment and Intangibles.
4. Dividends
The Group does not recognize the dividend payable before it is approved on the Annual General Meeting.
The dividends for 2019 approved by shareholders on 6 April 2020 were Denar 515,287 thousands.
Approved dividends are paid and retained earnings are appropriately decreased.
5. Borrowings
(In 000 MKD)
2020 2019 IND
Borrowings Amount % Amount % 20/19
6. Major Transactions
According to the Trade Company Law, Alkaloid AD Skopje has no major transactions in 2020.
The Group has no ultimate parent. The shares are widely held.
The consolidated annual report on the performance includes the financial results of the parent Company and
the following subsidiaries:
2020 2019
Subsidiary % of ownership % of ownership
All subsidiaries are 100% owned by the Company, except investment in Alkaloid USA with the equity
share of 49%. Although the investment of Alkaloid AD Skopje in Alkaloid USA LLC Columbus, Ohio
USA is 49%, the Company exercises control.
In 2020 a new subsidiary was established, named Alkaloid LGL DOO, Zagreb. In 2020 the Company has
increased its investment in one of its subsidiaries i.e. in Alkaloidfarm SA Fribourg by CHF 20 thousand.
The Company has representative offices in Russia and Ukraine. The operational results of the
representation offices are included in the financial statements of the Company.
8. Share capital
Ordinary Treasury Share
shares shares Total premium
The total authorized number of ordinary shares is 1,431,353 with a par value of EUR 25.56 per share. All
issued shares are fully paid. As of 31.12.2020 the number of voting shares is 1.408.796 shares.
During 2020, the Company acquired 800 of its own shares through Macedonian stock exchange and held as
treasury shares. The total number of treasury shares is 22,557. The number of 3,287 treasury shares is
reserved for former proprietors out of which 3,228 are priority shares and 59 are ordinary shares.
No compensations were paid to the Management Board members in 2020 and 2019.
In 2020, the amount of Denar 4,288 thousands were paid to the Supervision Board members (2019: Denar
4,402 thousands).
The total amount produced for 2020 is 17,236 tons, which compared to last years' production amount of
15,314 tons has increased for 13%.
The total sales revenues for 2020 are 12,132,328 which compared to last years' 11,102,808 have increased
for 9%. The growth in total sales revenues is a result of the increase of sales revenues on domestic market
for 9% and foreign market for 9%.
The largest portion of total sales revenues of 65%, is generated on foreign markets.
The largest portion in total sales revenues is generated on the Pharmacy segment with 10,527,723 thousand
denars or 87%, which compared to last years' 9,555,573 thousand denars indicates an increase of 10%.
Total sales revenues on domestic market are 4,268,849 thousand denars, which compared to last years'
3,907,246 thousand denars have increased for 9%.
The largest portion in total sales revenues on domestic market is generated on the Pharmacy segment with
3,546,326 thousand denars or 83%.
Attributable to the:
Shareholders of the Parent Company 1.167.524 9 1.015.318 9 115
Minority interests -39 - -58 - 67
Profit for the year 1.167.485 9 1.015.260 9 115
Sales by category
(In 000 MKD)
2020 2019 IND
Sales Amount % Amount % 20/19
Other income
(In 000 MKD)
2020 2019 IND
Other income Amount % Amount % 20/19
Finance income
(In 000 MKD)
2020 2019 IND
Finance income Amount % Amount % 20/19
Total: 1 - 892 - 0
Total revenues for 2020 are 12,553,883 thousand denars, which compared to last year have increased for
11%.
The largest portion of total revenues 98%, belongs to sales of goods, sales of commodities and other sales
revenues, which compared to last year have increased for 9%.
Other income have a portion in total revenues of 3% and compared to last year have increased for 72%
Finance income consist of foreign exchange transaction gains on borrowings and interest income on
borrowings. The portion in total revenues is insignificant.
Expenses by nature
(In 000 MKD)
2020 2019 IND
Expenses Amount % Amount % 20/19
Other expenses
(In 000 MKD)
2020 2019 IND
Expenses Amount % Amount % 20/19
Finance cost
(In 000 MKD)
2020 2019 IND
Expenses Amount % Amount % 20/19
Total expenses in 2020 are 11,225,484 thousand denars, which compared to last years' 10,160,408 thousand
denars have increased for 10%.
The largest portion in total expense of 27% belongs to Raw materials. Employee benefit expense has a
portion of 24%, Other expenses 4%. Finance costs consist of expenses on borrowings, the portion in total
expenses is insignificant.
Consolidated profit before taxes for 2020 is 1,328,399 thousand denars, which compared to last years'
1,188,311 thousand denars has increased for 12%. The portion of consolidated profit before taxes in total
revenues is 11%.
Consolidated income tax for 2020 is 160,914 thousand denars, which compared to last years' 173,051
thousand denars has decreased for 7%.
Consolidated Net profit for 2020 is 1,167,485 thousand denars, which compared to last years' 1,015,260
thousand denars has increased for 15%. The portion of consolidated Net profit in total revenues is 9%.
Assets
Non-current assets
Property, plant and equipment 6.163.085 41 5.418.377 40 114
Intangible assets 1.829.491 12 1.732.098 13 106
Deferred tax assets 4.211 - 5.353 - 79
Available-for-sale financial assets 7.114 - 7.411 - 96
Other non current receivables 64.049 - 116.646 1 55
Total non-current assets: 8.067.950 54 7.279.885 54 111
Current assets
Inventories 3.698.352 25 3.262.593 24 113
Trade receivables 2.603.483 17 2.405.172 18 108
Other receivables 309.741 2 288.902 2 107
Cash and cash equivalents 335.008 2 357.348 3 94
Total current assets: 6.946.584 46 6.314.015 46 110
Liabilities
Current liabilities
Trade and other payables 2.773.572 18 2.416.637 18 115
Income taxes 30.964 - 61.767 - 50
Current borrowings 613.748 4 466.656 3 132
Total current liabilities: 3.418.284 23 2.945.060 22 116
Non-current liabilities
Non-current borrowings 626.459 4 312.812 2 200
Non-current provisions 50.300 - 40.559 - 124
Deferred income tax liabilities 11.355 - 120 - 9.463
Total non-currents liabilities: 688.114 5 353.491 3 195
Performance indicators
(In %)
IND
Indicators 2020 2019 20/19
Net profit margin (net profit / total revues) 9,30 8,95 104
Net profit margin (net profit / sales) 9,62 9,14 105
EBITDA 17,13 16,73 102
Current ratio 2,03 2,14 95
Net debt to equity ratio 8,30 4,10 202
Return of equity 11,01 10,54 104
Return of assets 8,16 8,06 101
IND
Segment 2020 % 2019 % 20/19
Total number of employees on 31 December 2020 is 2,392, which compared to last year has increased for
7%.
Corporate governance
To comply with the provisions of Article 1 of the Law Amending the Company Law (Official Gazette of
RNM no. 290/2020 of 07.12.2020), the Management Board of ALKALOID AD Skopje established a
working group to draft a Code of Corporate Governance for the Company.
The Management Board of ALKALOID AD Skopje shall adopt the Code of Corporate Governance and
will make it publicly available latest by 30.06.2021.
Alkaloid AD Skopje